Kroger Ups Cap-Ex, Explores New Markets

Kroger said that, during the past five years, its customer-centric strategy has resulted in a 200 basis point increase in market share – defined as overall share of the products Kroger sells in the markets where the company operates – to 21.1 percent, according to Nielsen Homescan data. Today, nearly half of all U.S. households hold a Kroger loyalty card, and that figure increases to 85 percent in the markets where Kroger operates. The company has reported an industry-leading 35 consecutive quarters of positive identical store sales.

“Even through the worst of the recession, Kroger created 29,000 new jobs during the last five years. We are going to invest to grow and expand our store base, which will create more job opportunities over the next five years, and beyond,” Dillon asserted.

In addition to selectively expanding its store base and the markets it serves, Kroger said it will pursue other initiatives to drive growth, including: finding new customer channels – the retailer hopes to enhance the company’s digital and mobile platforms by leveraging its customer insights program; and testing new store formats designed to provide greater access and shopping flexibility to customers.

The company will measure its progress across several key performance metrics including return on invested capital (ROIC), identical sales excluding fuel, FIFO operating margin excluding fuel, and market share growth.

Kroger also reconfirmed sales and earnings guidance for the current fiscal year today.

On a regional level, Kroger announced that it will open its long-awaited 120,000 square foot Marketplace next month in Richmond (Chesterfield County) on December 11. No other retailer in any channel has increased its market share more than Kroger in the Richmond market over the past five years.

And in Hampton Roads, Kroger has big plans, too. Last month, the chain announced it will add 10 new stores in Tidewater over the next five years including a 124,000 square foot Marketplace at the site of an old Super Kmart in Virginia Beach which is slated to open in June 2013.